1. Which of the following grants absolute limited liability? D. Corporation. 2.

Question

1. Which of the following grants absolute limited liability?

D. Corporation.

2. “Piercing the corporate veil” becomes appropriate whenever:

D. When a federal agency comes to examine the financial records and the inventory.

3. When a creditor is permitted to collect a debt by taking a portion of someone’s wages, this is called:

D. Not possible.

4. A new type of corporation that not only seeks to make a profit but also tries to take actions which will have a positive impact on the public as well is called:

D. Close Corporation

5. David and Emily are officers of Fresh Bottled Water Corporation. As top corporate officers, their compensation is determined by Fresh Bottled Waters:

D. Shareholders.

6. David is not Edward’s agent but enters into a contract with Frank on Edward’s behalf. Edward later contacts Frank to affirm the contract. This is:

D. An agency by delusion.

7. Stocks that get a preference in receiving a dividend is:

D. Preferred stock.

8. If a corporation filed for incorporation in Pennsylvania and is conducting business activities in New Jersey, as to New Jersey the corporation is considered to be:

D. None of these.

9. Treadwell Tire Manufacturing Company employs Simon as an agent. To terminate Simon’s authority, Treadwell must give actual notice to:

Explanation / Answer

1. D. Corporation

2. C. A close corporation exists

3. B. Garnishment

4. C. Benefit corporation

5. B. Incorporaters

6. C. Agency by ratification

7. B. Payable stock

8. B. A domestic corporation

9. B. Simon and any third parties who are aware of the agency relationship.

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